I study the market for lending and borrowing securities in the United States. I find that by making securities available for borrowing, mutual funds acquire information about short selling, which they exploit for trading. Funds with discretion in their investment choices rebalance their...

Short selling has the potential to improve the efficiency and fairness of equity markets. Yet institutional investors face both private and regulatory constraints to short selling. We document these obstacles and consider the potential benefits of removing them. We advocate that institutional...

Both institutional owners and short sellers decrease their positions prior to earnings announcements, and increase their positions in the post-announcement period. Pre-announcement changes in institutional holdings and short interest have significant explanatory power with respect to abnormal...